Those funky-looking QR codes – not just a fad

You’ve probably noticed in the past few months these weird squiggly square images that look like a cross between a bar-code and a Rorschach test.  They’s been popping up in strange places, on product packages, sometimes on store windows, in magazines and in some extreme cases on the walls of buildings.  Some geek-bloggers have also embedded them in their email signatures (you know who you are).

You’ve probably dismissed them as the latest uber-geek fad kind of like “flash-mobs” (remember them? Where random strangers would randomly assemble in a random place for a synchronized random activity – like standing still in Grand Central station).

But in fact there is something here that is purposeful and provides distinct value to consumers and businesses alike.   Much like any emerging technology, it will likely take some time before standards, adoption and technology will evolve to make this ubiquitous.  But this seems to be here to stay in one form or another.

So, what is it?

It’s called a QR Code (for Quick Response) also called a 2-D barcode.  An easy analogy is the UPC bar code that has existed for decades.  But a UPC is essentially a machine-readable number which needs to be looked up in a database to figure out what it is.   QR Codes on the other hand have actual data – words – embedded in them that can be used to represent anything – a description of the product, a URL for the website.

What it means for consumers

Over the years, we’ve moved from simpler expressions of online identity – “www.pets.com” – to more complex “www.mypetstore.biz/fish/special-offer” that are harder to digest and re-type into a browser.  For online experiences, this has spawned an industry of URL shorteners such as Bit.ly that tamp it down into a smaller URL such as “bit.ly/dhgdh4j”  but this doesn’t help when you’re trying to retype what you saw in a store window into a browser.

QR codes, on the other hand, are meant to be read by smartphones using their camera.  So a user snaps a picture of a QR code and it translates the code into whatever was meant to be communicated  - a web-site, a description of a special offer.

What it means for businesses

One of the most persistent challenges in small business marketing (or larger businesses for that matter) is understanding how well your marketing is working – whether people are coming to your store because of an online ad, or a billboard or your monthly newsletter.  For online experiences, these problems have, for the most part, been addressed by analytics or marketing tools.  But how can you tell how many people viewed your special-offer in the store-window?  That’s the critical capability that QR codes provide.  Because a visitor needs to scan the QR code to understand what it means, they serve to measure and track “impressions” in the offline world.

There are also a handful of innovate services such as StickyBits that have combined this with checkins/rewards model to create new channels for marketing offers and coupons.

An additional value, not so readily apparent, is that once we critical mass adoption is reached, the data resulting from large numbers of users scanning anything is itself of immense value, especially when combined with location information.  For example, the frequency of scans on a particular street can indicate that it has high retail value relative to other adjacent streets.  There are other successful analogies here.  Wireless companies use cell-usage data to help understand traffic flow and congestion.  And companies such  ClearSpring use online browsing behavior and content-sharing to help advertisers target online ads.

Why now?

QR codes have been around for a few years now.  Pet Shop Boys released a single in 2007 with a QR code to make a political statement.  San Francisco used them in 2008 to enable self-guided tours by attaching audio clips to historical landmarks.   But they are now on the cusp of mainstream adoption for two reasons – (1) technology advancements make quick scanning using your phone a reality and (2) consumers behavior/psychology is slowly evolving to support use of online services to augment offline experiences.  Think of users checking in to their bar using FourSquare, or even more relevant, looking up product pricing by scanning the bar-code using RedLaser.

Forrester estimates that 1% of all internet users and 5% of smartphone users have scanned a QR code in the past three months.   It’s a promising start.

Image by Flickr user mathplourde (Creative Commons)
Image by Flickr user NJ Tech Teacher (Creative Commons)
Image by Flickr user clevercupcakes (Creative Commons)